Independent
authors are successful because they sell an inexpensive product in a
creative way (using technology to circumvent the established
publishing industry). People are simply more willing to take a risk
on a $2.99 book than they are on a $14.99 book. That is the
self-publishing advantage. That advantage is not dooming the
publishing industry, but major book publishers must face two
realities: A) their product is overpriced and B) their industry is
inefficient and uncreative.
Perhaps
because of this, or in spite of this, Penguin and Random House are
merging.
They claim authors will benefit
from this merger—that they'll get “better service.”
Can one 4-billion dollar corporation take care of authors better than two 2-billion dollar corporations can? Can the one do what the two couldn't?
Can one 4-billion dollar corporation take care of authors better than two 2-billion dollar corporations can? Can the one do what the two couldn't?
This merger will take years.
It won't be approved (if it is approved) until next year, and
even then it'll take a while for everything to get sorted out, so
what can we expect in the meantime?
1
As the articles suggest, this could be
the first of two or more consolidations in the publishing
industry. Several other large publishers could merge, especially if
the new Penguin-Random House is immediately successful—they'll want
to capture that lightning in a bottle, and continue to compete.
If having a “Big Six” was bad,
having a “Big Three” or “Big Two” will be worse. The problems
Penguin and Random House had with authors will grow worse after the
merger. Royalties will go down, not up, and publishers will be even
less willing to take on fresh talent. The bigger these companies get,
the more they'll have to stick to old business practices, doing what
worked for them before, which means selling the same bylines to the
reading public.
2
As with any merger, they will cut where they can.
Employees (people to you and I) are
going to lose their jobs in the background mechanics of either
company. Penguin and Random House benefit financially by cutting
salaries in places the companies overlap, and I'm sure a major
publishing company, when properly motivated, can find a lot of
unnecessary jetsom.
Efficiency demands this happen, but I
do not imagine the extra savings will be thrown at authors. Instead
of using the larger revenue and market share to take chances on
unknown authors, it'll be used instead as an advantage in
negotiations.
3
Amazon keeps things cheap, benefiting
readers, by basically ripping off publishers—at least from a
publisher's point of view. Self-published authors have a way around
this, because they don't have the overhead of a publishing house
(paying all those employees), and so can afford to give Amazon a 30%
cut. 30% for a giant corporation is a bitter pill to swallow. But
now, with 40% market share, this new Penguin-Random House behemoth
can have a little room to work.
Amazon still has the advantage, of
course, especially as they begin to soak up more self-published
authors (they're practically their own publishing house). No matter
how big any one publisher gets, Amazon is still the leading
distributor in the world. Amazon will be hurt less by losing a publisher's business, than a publisher will be hurt by losing
Amazon's.
4
Penguin-Random House will find more success bargaining with authors. They can force authors to take a lower royalty in exchange for a broader audience. The logic is that authors will have higher sales, and thus more money, but let's be honest: it's hard selling books, and any promise of this nature is wishful thinking.
Unlike Amazon, individual authors
and agents won't have a choice in the matter. They'll have to take
the lower royalty or walk away to another, smaller publisher, less able to market the same book; or self-publish with Amazon,
and lose the glam that comes with a major imprint.
~*~
What publishers need is more
freedom to take risks, but size won't help them do this if they're
unwilling to change their culture. More money doesn't mean greater
flexibility, it means more pressure to succeed.
And so Penguin-Random House
will squeeze a little more money out of the system now, but at the
risk of sacrificing future market share to Amazon and self-published
authors.
Are Penguin and Random House
merging because they don't think they can continue on as things
stand—that they must unite to do battle against the self-publishing
industry and Amazon? That's open for debate. They could just see an
opportunity to make more money while they can make it, or they're
hedging their bets. Whether this is a tactic of war, borne of
necessity, or an act of convenience, it means a big change for
authors expecting to get a slice of the published pie, and even for
authors who choose to go it their own way.
We've seen a lot of change
in the publishing industry in the last few years, and now we're
seeing the first inklings of the changes to come. The largest
publishers in New York are finally reacting. It's their move now, and
they're starting to make it.
When the dust clears,
self-publishers and Amazon (as well as Smashwords and other
e-publishers) will have their turn again, but don't count on them
waiting to make their move. The smartest ones will already be
jockeying for positions in this new world order.
Posts
Hello sir, wondered why I had not seen you on face book guessing your sticking to google +? Anyway sorry not been about much have had two months off work not been well. Good article mate will be interesting to see what happens. Miss ya on FB
ReplyDeleteI hope you start feeling better. :(
DeleteGreat post and you make great points! I agree; the bigger they are the worse it will be. It will be terrible to see a Big 3 or Big 2 rather than the Big 6. But this tells us that they are feeling the pressure. Who knows, in the midst of all of this, maybe something else new will come out of it. It is definitely going to be interesting to watch, and I think this will make more opportunities for Indies.
ReplyDeleteI'm looking forward to everything that may happen. We'll at least never be bored with where the publishing industry is moves to.
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